Flexible Budget for Fabrication Department Cabinaire Inc. is one of the largest
ID: 2438821 • Letter: F
Question
Flexible Budget for Fabrication Department
Cabinaire Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Trim Assembly. Assume the following information for the Fabrication Department:
Prepare a flexible budget for 8,000, 10,000, and 12,000 filing cabinets for the month of October 2016, similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers.
Steel per filing cabinet 46 pounds Direct labor per filing cabinet 30 minutes Supervisor salaries $117,000 per month Depreciation $22,000 per month Direct labor rate $18 per hour Steel cost $1.44 per poundExplanation / Answer
Cabinaire Inc-Fabrication Department Flexible Production Budget October 2016 (assumed data) Units of production 8,000 10,000 12,000 Variable cost: Direct labor 72000 90000 108000 Direct materials 529920 662400 794880 Total variable cost 601920 752400 902880 Fixed cost: Supervisor salaries 117000 117000 117000 Depreciation 22000 22000 22000 Total fixed cost 139000 139000 139000 Total department cost 740920 891400 1041880
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